The Emergence of New Organisational Forms in a Highly Regulated Context: The Role of Analogy

Abstract

This paper investigates the role of analogies and theorises the process of collective analogising by different actors in the emergence of new organisational forms in highly regulated environments. Through a granular qualitative analysis of the emergence of the first generation of loan-based crowdfinding platforms in the UK, I demonstrate that a particular combination of non-financial and financial analogies enabled a degree of abstraction to create conditions for experimentation and innovation. Moreover, a collective process of analogising by different actors, with the specific role of the regulators and lawyers enabled this new organisational form to shape the existing legal frameworks and develop a new legal category. These results, while confirming the important role of analogies for the legitimacy of new organisational actors, show that analogies work not only when close similarities exist between the source and target domains but also when certain combinations of analogies from different domains allow a particular degree of ambiguity, enabling innovation. Besides the important implications for theory and practice, the results of the paper are significant for policy-makers and regulators for their understanding of the nature of the relationship that might exist between the policies and frameworks they develop and the emergence and functioning of innovative, platform-based organisations.